Every business needs a lot of insurance because businesses can go through a lot. From insurance to cover damages if an employee gets into an accident to insurance that protects your place of business from fire, theft, or damage from natural disasters, insurance is a must-have for any business to stop them from going into the red when the unexpected happens.
3 Types of Insurance that are Costing Your Business Too Much… and What You Can Do About It
However, there are types of insurance that can cost your business far more than you could ever hope to cover, or the circumstances around the insurance are so rare that they won’t happen. Here are some pieces of insurance that might cost your business too much and what you can do when encountering them.
The Business Owners Policy (BOP)
The aptly named BOP policy can easily bop your wallet with high costs. This combines general liability insurance with property coverage, giving you liability coverage for customer injury, property damage,product-related claims, and commercial building and movable property coverage.
This can be helpful,l and bundling the coverages can save you money, but sometime,s simply buying separate coverages can be cheaper and more customizable, depending on the size of your business.
Commercial Umbrella Insurance
Commercial Umbrella Insurance boosts your liability coverage whenever you reach the maximum policy limit for general liability insurance, commercial auto insurance, or employer’s liability insurance. However, this insurance can be very situational if you aren’t reaching the maximum policy limit and is one of the more expensive insurance pieces per month.
If you regularly cover high costs and push against the maximum policy limit, you must keep it around. However, if you aren’t using it as much as you want, you might need to let it go.
Car Insurance for Employee Cars
Here are some interesting facts about car insurance. Car insurance for your employees can seem like a great way to keep them safe on the road and your business safe from car accident lawsuits.
However, car insurance for employee cars can start to cost a lot as you scale your business and more cars and names are added to the list. Even if they never get into an accident or cause any problems, the monthly cost of all that insurance can add up.
However, you might be able to have your employees use their cars for your business, and then they can carry the liability insurance on their auto policies. Of course, this has pros and cons, but it could be worthwhile.
So How Do You Manage These Costs?
Most of the time, you can’t get away from insurance or not have it for your business or your employees. However, you can do some things to manage the costs and stop the insurance from fully draining your business’s reserves every single month.
First, don’t be afraid to look around for different types of insurance offered by different providers. You might have stuck with one type of insurance provider because they were best whenever you were small or just starting; however, no,w because you are bigger,r the rates aren’t the best.
Many companies offer different rates or bundles, and it might be worth changing providers so you can get the insurance everyone needs. Plus, half the time,e you can get the same insurance at a much better price! So don’t hesitate to shop and see what you find.
Consider Your Growth
As your company grows, your insurance costs are going to go up. That is a fact because the more complex your company becomes and the more layers and moving parts are added, the more risk exposure you have. That means your insurance will go up because it is riskier for those companies to work with you, and plenty of factors affect your growth.
So while everyone in the business world tells you to grow, don’t start growing and expanding before you know that you can handle all the increased costs your growing business will cause. Sure there is a lot of opportunityforn for growth, but there are a lot of costs,s too, so make sure you research before you make that change.
Don’t Give Up On Insurance
Having more expensive insurance is one of the problems your business will need to deal with, and while you can’t drop insurance and stop the cost entirely, you can learn how to manage it. This can help your business skills because some problems will need to be managed rather than outright eliminated, and you certainly don’t want to eliminate your insurance!